Merrill Lynch Says 4 Broken 2019 IPOs May Have Huge Potential Upside


This is another cyber and data security company with a stock that has been shellacked since the IPO. Ping Identity Holding Corp. (NYSE: PING) is a leader in identity access and management. Its IAM products safeguard enterprise applications and data by providing controls around user authentication, access and more.

Ping’s single-sign-on technology helps streamline user workflow by providing a single password for multiple applications to reduce log-ins. Additional product features include consumer identity management, Internet of Things (IoT) and API management. Ping differentiates with a history of complex deployments across hybrid networks.

The Ping Intelligent Identity platform provides customers, employees, partners and, increasingly, IoT, with access to cloud, mobile, SaaS and on-premises applications and APIs, while also managing identity and profile data at scale. Over half of the Fortune 100 choose use the company for the identity expertise, open standards leadership and partnership with companies including Microsoft and Amazon.

The $21 Merrill price objective compares with the $21.85 posted consensus target. The shares closed most recently at $16.71 apiece. Ping’s lock-up period expiration is March 7, 2020.

Uber Technologies

This is the highest profile company in the broken IPO club, and it may be the most exciting idea of all. Uber Technologies Inc. (NYSE: UBER) is a mobility platform that services 63 countries, more than 750 ridesharing markets and over 500+ Eats markets, and nearly half of its core platform revenue is generated outside of the United States.

The company’s monthly average paying customers represent 1% to 2% of the world’s population on a monthly basis. For rides, Uber acts as a middleman, connecting riders with drivers. For Eats, the market is three-sided, connecting customers, restaurants and drivers. Uber also has an emerging freight business.

The company’s main competition is Lyft, and the analysts discussed recent comments from it:

At the Wall Street Journal Tech Live event, Lyft CEO Logan Green announced that the company is targeting EBITDA profitability in the fourth quarter of 2021. Lyft’s commentary supports view that Uber will continue to benefit from decreasing competitive intensity in U.S. ridesharing. We see opportunity for Uber stock to benefit from increasing disclosure, and see potential stock support from sum-of-the-parts valuations.

Merrill has set a $44 price target, but the consensus target is higher at $48.73. The stock closed Thursday at $31.50. Note that the lock-up of Uber shares ends November 6.

These four stocks have been absolutely blasted since the sentiment for IPOs that don’t make money soured. With the potential for additional shares to hit from lock-up expiration’s, it makes sense to wait to buy shares until they all have expired. A deluge of additional shares may make these battered stocks trade even lower. With that in mind, the upside could also be staggering.

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